If you want to protect the people you love, life insurance should be an important part of your financial planning. It can provide a meaningful death benefit for your family, give you a way to leave a legacy, and much more.
What are some uses for life insurance?
The main benefit of a life insurance policy is to provide a death benefit to beneficiaries should you pass on. There may be a variety of advantages to the life insurance policy you choose, such as coverage for final expenses and help supplement your retirement savings. Here are some features you may be overlooking.
Living benefits
Some products include living benefits, which allow you to accelerate a portion of the death benefit while living, if you should be diagnosed with a qualifying illness. These benefits are subject to eligibility requirements. The funds can be used toward medical bills or any use of your choosing.
Coverage for final expenses
The national median cost for a funeral could end up costing thousands of dollars. One of the biggest costs for your family when you die is your funeral. You may leave behind end-of-life expenses such as medical bills, which will fall on the shoulders of your loved ones. Life insurance can help prevent that kind of financial and emotional strain on your family by helping to cover the cost of your burial and other expenses.
Retirement planning
Whether you started retirement planning too late, or you worry you simply won’t have enough retirement income to meet your needs in your later years, life insurance can help supplement your retirement income with some policies that may offer cash value growth potential. You can access cash value through policy loans or withdrawals and the money could be used for a generally tax-free income stream.
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Funds for your child’s college
Did you know that life insurance can be a great college funding solution? With permanent life insurance, you can protect your family and build college savings at the same time. With permanent life insurance, you have the opportunity to grow cash value by taking advantage of indices that are linked to the stock market when the market is high subject to a cap, while protecting yourself from loss when the market is low with a 0% floor. You can then use the cash value that you may accumulate over time to help pay college tuition costs, whether it’s an in-state or out-of-state college.
Business planning
Are you aware of the role life insurance can play in business planning? Whether you’re an entrepreneur thinking about how to protect your share of the business or are looking for ways to reward your top performers, life insurance could be a solution.
Talk to an agent to help
If you want to learn more about all the options available in your life insurance, consider making an appointment with an agent to discuss your policy today.
The primary purpose of life insurance is to provide a death benefit to beneficiaries. Because of the uncertainty surrounding all funding options except savings, it is critical to make personal savings the cornerstone of your college funding program. However, even a well-conceived savings plan can be vulnerable. Should you die prematurely, your savings plan could come to an abrupt end. To protect against this unexpected event, life insurance may be the only vehicle that can help assure the completion of a funding plan. In addition to the financial protection aspect of insurance, the tax-deferred buildup of cash values can be part of your college savings plan. Generally, if the policy is not a Modified Endowment Contract then tax-free withdrawals can be made up to the contract’s cost basis. Moreover, if the policy is not a Modified Endowment Contract, then loans in excess of the cost basis are also tax free as long as the policy remains in force.
The death benefit will be reduced by the amount of the death benefit accelerated. Since benefits are paid prior to death, a discount will be applied to the death benefit accelerated. As a result, the actual amount received will be less than the amount of the death benefit accelerated. An administrative fee is required at time of election.
